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Cargill labor dispute could heat up an already hot beef market

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The contract negotiations are coming as a global labor squeeze strengthened workers’ bargaining power.

By Marcy Nicholson

Beef prices in North America are soaring amid global supply chain snarls, and now a labor dispute could inject even more uncertainty into the market. 

Thousands of workers at a Cargill Inc. plant in western Canada’s Alberta province have threatened to go on strike just as the red meat touches record prices in the northern nation. It’s the latest example of workers flexing newfound leverage in a company critical to food supply chains. 

Cargill and the union that represents workers at the meatpacking plant were at the negotiating table Wednesday, but no further dates have been scheduled. Employees last week voted overwhelmingly in favor of a strike if Cargill does not make them a satisfactory offer.

The facility in High River is the largest in the country and accounts for roughly 40% of Canada’s beef processing capacity. If its workers go on strike, Canadian consumers could see a drop in packaged beef on store shelves as well as more “meatflation.” Farmers will also likely have to hold onto their animals longer, which increases production costs. 

“Things are going to come to a head in the next couple of hours,” said Scott Payne, a spokesman for United Food and Commercial Workers Union 401, in a Wednesday phone interview. “The possibility of a strike at Cargill in the very near future is very real unless the company comes to the table with a fair offer.”

Cargill has not yet provided a comprehensive offer or even discussed wages, Payne said. The company did not immediately respond to a request for comment.

Meat workers have complained about pandemic health and safety after a Covid-19 outbreak last year sickened half of the plant’s staff and resulted in a temporary shutdown.

The contract negotiations are coming as a global labor squeeze strengthened workers’ bargaining power. Businesses are struggling to hire and retain staff as demand swells.

Cargill isn’t alone. Around 10,000 employees at Deere & Co., the world’s biggest tractor maker, have been on strike since mid-October. Workers at four of Kellogg Co.’s plants are also on strike, forcing the company to bring in cereal from abroad to supply the U.S. market.

Around 185 large union contracts in the U.S. are set to expire by the end of 2022.

--With assistance from Jen Skerritt.
© 2021 Bloomberg L.P.
TAGS: Beef
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